Wine fortification

Wine fortification is the process of adding spirit to wine or grape must. You can add the spirit during or after wine fermentation.

The type of product that is fortified, the spirit used to fortify it, and the final alcoholic strength of the end product are used to work out whether wine equalisation tax (WET) or excise applies. Beverages with an alcohol content of 1.15% or less are not subject to WET or excise.

To work out if the fortified product is subject to WET or excise, see Table 1.

If the fortified product you will be making is subject to excise, you must hold an excise manufacturer licence before you start fortifying. A manufacturer licence allows you to manufacture and store excisable goods (in this case, the fortified product).

If you are an excise manufacturer you must report the quantity of product being delivered into home consumption (into the marketplace) on an excise return. You must use this form to pay the appropriate rate of excise, usually on a weekly basis.

WETR 2009/1Wine equalisation tax: the operation of the wine equalisation tax system

WETR 2009/2Wine equalisation tax: operation of the producer rebate for other than New Zealand participants

Concessional spirits used in wine fortification

If you want to use spirits to fortify Australian wine or Australian grape must, you can apply for a concessional spirits permit. A permit enables you to use the spirit for approved commercial purposes (in this case fortification of Australian wine). Concessional spirits are free of excise duty. You will need a permit whether you produce the spirits yourself or obtain them from a licensed supplier.

Storing fortifying spirits

You must store spirits in vessels with accurate measurements and record the quantities you store.

Your equipment must be appropriate for the size of your operations and the amount of spirit you will hold. For example, if you are a small fortifier, you may receive and store spirits in 200-litre drums.

You need to be able to reconcile the fortifying spirit used in attachment 1 (above) with attachment 4 (below).You must contact us to tell us about any:

significant spillage

theft of spirits from your premises or in transit from your supplier

excessive losses.

If you can't account for spirits to our satisfaction, you may have to pay an amount equal to the excise duty you would have been liable to pay if the spirits had not been given concessional (excise-free) treatment. This applies regardless of whether you have a concessional spirits permit or an excise licence.

We'll tell you in writing if we make a decision that you need to pay an amount equal to the excise duty and we'll also advise you of your review rights at the same time.

Our commitment to you

We are committed to providing you with accurate, consistent and clear information to help you understand your rights and entitlements and meet your obligations.

If you follow our information and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the information on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our information does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.